Monday, July 14, 2014

It’s a Company Vehicle, Right? Wrong!

When you are hired by the City and you are given a “work” vehicle, do the same rules apply as with private industry?  No, they do not.  There are Minnesota Statutes governing the use of municipally owned vehicles.  The statute outlines the use of these vehicles for personal reasons.  What considerations need to be made and what policies should the City adopt regarding use of city-owned vehicles?

The Statute and What it Means:
MN Statute 471.666 sets forth the restrictions on the use of municipal vehicles.  Subdivision 2 of the statute outlines the restrictions on use of municipal vehicles.  It is indicated that a local government vehicle can only be used for local government business, including personal use that is clearly incidental for local government business.  It also states that the vehicle cannot be used as a vehicle to commute to and from work for the employee. 

Example:  A city employee uses the city vehicle to get to a work related seminar.  On the return trip from the seminar, the employee takes a detour to a shopping mall to make some non-work related purchases.  If the employee is in an accident in the mall parking lot, there may be coverage questions that may result in the city’s coverage not applying to a portion or portions of the loss.

Exceptions to the Statute:
Exceptions to the statute regarding to and from an employee’s residence are outlined in Subdivision 3 of the statute.  These exceptions include when the vehicle is used in connection with work-related activities outside of the employee’s scheduled work hours.  Another exception is if the employee has been assigned the use of the vehicle on an extended basis and their primary place of work is not the local government work station where they are permanently assigned.  This would apply to field employees.  The third exception is if the number of miles traveled or the time needed to conduct the business will be minimized if the employee uses the municipal vehicle to travel to their residence before or after traveling to the place of local government business.  The last exception is those public safety vehicles that are owned or leased by the local government entity.  

Why Is This Important?
If an employee has an accident and it is determined that their personal use of the vehicle falls outside of the statute and/or the City’s fleet policy, the employee assumes significant personal risk.  The risk could be financial in nature and depending on the City’s policy, there may be disciplinary action for the lapse in policy adherence. 
What Can We Do?
  • Regularly review employee use of city-owned vehicles with special attention to personal use of the vehicles.
  • Consider adopting a policy that prohibits the personal use of city-owned vehicles.
  • Train employees on the policy and develop a form to clearly show when use of city-owned vehicles is “authorized”.
  • Require employees to use their personal auto if there is a possibility of personal use or if the employee would like to have their spouse or family member accompany them.

The bottom line is city/municipally owned vehicles must adhere to a different set of rules governed by MN Statute 471.666.  This differs greatly from the private industry’s guidelines on company vehicles, which are determined by each individual company and are not subject to the statute above.

By Tara Bursey

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